Michael Saylor’s Strategy Inc. has relaxed its own rules on stock issuance, just weeks after pledging tighter restrictions. The shift gives the company more flexibility to raise funds for Bitcoin purchases, even as concerns about investor dilution grow.
According to Bloomberg, Strategy previously promised not to sell new shares if its stock traded below 2.5 times the value of its Bitcoin holdings a metric Saylor dubbed the “mNAV premium.” That rule was designed to reassure investors worried about dilution, with exceptions only allowed to cover debt interest or dividends on preferred equity.
Now, under its revised policy, the company says it will issue stock below that 2.5x threshold “when otherwise deemed advantageous to the company.” Analysts such as Brian Dobson of Clear Street believe the looser language allows Saylor to be more opportunistic in financing new Bitcoin buys.
Strong Holdings, But Stock Lags
Strategy remains the world’s largest corporate Bitcoin holder. On Aug. 18, the firm disclosed that it purchased 430 BTC for $51.4 million in the prior week, adding to a 155 BTC purchase earlier in the month. In total, Strategy now owns 629,376 BTC at an average price of $73,320.
With Bitcoin trading near $119,666, those holdings translate to more than $26 billion in unrealized gains.
Still, the company’s stock hasn’t kept pace. Since hitting a record high in November, shares are down 22%, compared to Bitcoin’s 23% rally over the same period. This decline has raised questions about whether Strategy’s ambitious financing structure — which includes four separate series of preferred stock offerings can withstand reduced demand for its at-the-market equity sales.
A Financing Balancing Act
The policy revision comes at a delicate moment. Demand for Strategy’s preferred stock program, a perpetual equity product launched in July, has been uneven as investors weigh the shrinking premium on Strategy’s shares against new competition from Bitcoin ETFs and other crypto-treasury firms.
For critics like short seller Jim Chanos, the move underscores concerns about sustainability. By loosening issuance rules, Saylor is signaling a determination to keep growing the company’s Bitcoin reserves but at the potential cost of further shareholder dilution.
Outlook
The latest change shows how quickly Saylor’s bold strategy is being tested. With Bitcoin near record highs, Strategy’s vast reserves continue to anchor its long-term vision. Yet the company’s share price weakness and evolving financing tactics highlight the fine line between aggressive Bitcoin accumulation and maintaining investor confidence.
For now, Strategy’s bet remains clear: keep buying Bitcoin, even if that means adjusting the playbook to do it.
